Intelsat rockets back to normal

July 31, 2015

Stephen Spengler, Intelsat’s CEO, could have started his half-yearly (Q2) results presentation by using a biblical quote, saying “O Ye of Little Faith” as if to chastise those shareholders who did not maintain loyalty towards the company. Within moments of the results being declared, Intelsat’s share price had bounced a massive – and probably record-breaking – 27.1 per cent from an all-time low to a much more sensible $9.66.

The reasons for this rush of confidence were reliable, solid and an even impressive set of results given the problems with one of its peer rivals. Revenues at Intelsat came in 3 per cent ahead of consensus expectations (and EBITDA 4 per cent ahead) and highly positive news that far from being impacted by the recent SpaceX and Proton launch problems, Intelsat is remarkably bringing FORWARD its next launch (Intelsat-34) by a few weeks to about August 20th, and that other satellite launches (Intelsat-29e, Intelsat-31) would not be materially delayed.

Intelsat reported total revenue of $598.1 million and net income of $60.2 million for the three months ended June 30. EBITDA stood at $462.3 million, or 77 per cent of revenue. Both elements were down 3 per cent y-o-y but the market was extremely happy that a sense of recovery and improvement was in the air.

Splitting the numbers up, Network Services revenue was $270 million (down 6 per cent), Media was $222 million (up 2 per cent) and Government $95.3 million (down 8 per cent).

“Contract renewals in each of our network services, media and government businesses are within our expectations for the year and include promising contract expansions that use traditional and next generation Intelsat Epic services. As a result, today we are re-affirming our guidance for 2015 revenue and Adjusted EBITDA. Our guidance also reflects the shifting of some of our 2015 capital expenditures to 2016, due to timing of milestone achievements,” said Spengler.

Intelsat’s average full rate over 2200 transponders was 75 per cent (flat y-o-y) and its all-important contract backlog stood at $9.5 billion.